Under Scrutiny

The need to ensure that anti-money laundering checks are carried out to the letter has never been greater. Richard Reed of The Negotiator consults some experts in the field.

When Russian troops surged into Ukraine, it signalled the start of not just one of the bloodiest conflicts in Europe since the Second World War, but the end of the ‘London laundromat’. Russian oligarchs and supporters of other unsavoury regimes had long used the Capital as a way to clean their dirty money. All that changed when the first Russian tank crossed the border. Now the heat is on. When it comes to cracking down on money laundering, the Government has the property industry well and truly in its sights.

Agents already have to carry out ID checks and verify the origins of cash being used to buy a property to ensure it is not the proceeds of crime. In 2017 that duty was extended to buyers, as well as sellers. Now the new Economic Crime Act puts added pressure on agents to make sure that the buyers and sellers of property are not on the sanctions list of Russian oligarchs or other blacklisted individuals.

When it comes to the property sales process, the buck stops well and truly with the estate agent handling the transaction. It’s not just a matter of carrying out the appropriate checks – agents must also have an anti-money laundering (AML) risk-assessment procedure in place and anyone handling the sale must have received appropriate AML training. Failure to do so can bring unlimited fines and up to two years in jail. And it’s not just the smaller agents who are likely to be caught out. In 2020 Purplebricks was given a £266,973 fine by HM Revenue & Customers for breaches of money-laundering rules, the largest ever given to a UK estate agency at the time. The previous year, Countrywide had been handed down a £215,000 fine for similar offences.

Read the full article on The Negotiator, with comments from FCS Lead AML Consultant, Malcolm Driscoll.